Advantages and Disadvantages of Cashback
Posted on 02. Apr, 2010 by admin in Personal Finance
Cashback is when you have the option of receiving cash after a purchase. For example, if you go to a grocery store and your total comes to forty dollars. Once you swipe your card, you will be given an option of cashback or not. If you choose yes, you get to choose the amount you want back. Most grocery stores only allow up to forty dollars cash back. Once your transaction is complete your cashier will hand you the cash. The advantage of this option is that you can get cash when needed at any time. If you are in need of cash, and do not have any money in the bank, cashback can be a blessing. Unfortunately, this is not free money, as many people may think so. Once you choose the option to get cashback, there are disadvantages as well. Of coarse, you will have forty dollars now, but that forty dollars could end up costing you.
Make sure you know what the terms are when you use cashback on your credit cards. Some companies may charge a fee that will later show up on your statement. Cashback also comes with a high interest rate, so the longer it takes for you to pay the credit card company back, the more the cash will cost you. As you could see, cashback is a great option, yet you need to be careful when using it.
